Public Service Board approves Vermont Yankee's operation to end of the year

By BOB AUDETTE / Reformer Staff

Posted:
03/28/2014 01:40:42 PM EDT

Updated:
03/28/2014 03:31:27 PM EDT

Vermont Yankee is seen here from the Hinsdale, N.H., side of the Conneticut river.
Zachary P. Stephens/Reformer

BRATTLEBORO -- Noting that if Entergy was applying for a 20-year extension of its operating license for Vermont Yankee, the Public Service Board wrote "Its track record may well have led us to find that ownership and operation would not promote the general good."

However, wrote the three members of the board, while Entergy's decision to cease operations on Dec. 31, 2014, "does not excuse Entergy VY's past bad conduct ... we find that granting the CPG extension subject to the conditions set out in the memorandum of understanding is reasonable and in the best interests of the state."

The Public Service Board has been reviewing Entergy's application for a CPG for extended operation for more than six years. When it was initially submitted to the board, Entergy requested approval for operation through 2032. However, in August 2013, Entergy announced because of the depressed market value of electricity due to the flood of natural gas into New England, Yankee's continued operation was no longer financially sensible. It announced it was closing the plant at the end of this year and amended its CPG application to reflect that change.

Without the MOU negotiated between Entergy and the state and announced in December 2013, the Public Service Board noted, Entergy's "unacceptable conduct that erode(d) public trust and confidence in its capacity to act in good faith and to engage in fair dealing" might have led it to deny approval of the certificate.

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Even though "The history is troubling and falls well below the level of conduct the Board expects ... We are persuaded Entergy VY can realistically be expected to be a fair partner for the short remaining operating period."

The MOU calls for $10 million over five years in economic assistance for Windham County; the release of $5.2 million to the state's Clean Energy Development Fund (at least 50 percent of which must be directed to Windham County); the payment of $25 million by Dec.

(AP Photo/Vermont Yankee Corporation)

31, 2017, ($10 million of that upon issuance of the CPG) into a trust fund set aside exclusively for site restoration over and above that required for decommissioning by the Nuclear Regulatory Commission; and the agreement to begin cleaning up the site within 120 days of declaring the decommissioning trust fund adequate for the job.

"The existence of the MOU indicates that the parties to it have been able to restore a working relationship," wrote the PSB.

While some of the parties to the proceedings questioned Entergy's integrity and its willingness to stand by the new MOU given its "mixed history" with the state, the Public Service Board noted the memorandum offered a number of advantages "that were not clearly obtainable through litigation ..."

"These benefits ... could not have been obtained absent the MOU. Thus denial of the CPG would be adverse to Vermont and its consumers."

The board noted that even if it had denied the amended CPG, Entergy would most likely need time "to wind down activities and sell its assets. Effectively, this means that the VY Station might still operate through the end of 2014 even if the CPG was denied. By approving the MOU, the same outcome will come to pass, only with the added tangible benefits ..."

The board admitted there were a handful of outstanding issues that need to be resolved, such as a National Pollutant Discharge Elimination System permit that is 12 years old and whose application for renewal has been under review by the Vermont Agency of Natural Resources for the past eight years.

"If the VY Station were going to operate for an additional 18 years, this evidence might cause us to conclude that Entergy VY had not met its obligation to demonstrate that the discharge would not adversely affect the water quality," wrote the board. However, "ANR, which had previously asked that we deny Entergy VY's petition on water quality grounds, is now persuaded that the administrative process ... is workable and adequately protective of the environment."

There is the possibility that Vermont Yankee might have to operate in a closed cycle, meaning ANR might prohibit it from discharging thermally heated water back into the Connecticut River and instead have to rely solely on its cooling towers.

"Among the thermal discharge issues Entergy VY must address with ANR in the ... process is the possibility of operating the VY station in a closed cycle," the board wrote. However, it also noted, "the short-term nature of the ongoing permitted thermal discharge diminishes the concerns over water purity."

The Public Service Board also rescinded a clause in a certificate of public good issued in 2008 allowing Yankee to store spent nuclear fuel in dry casks. That clause stipulated that it could only store waste produced up to March 21, 2012, the end date of the operating CPG that was issued when Entergy bought the plant in 2002.

That decision means Yankee can store in dry casks any waste produced up to the end of this year.

Also up for clarification is how complete site remediation must be to meet the state's greenfielding requirement. The Windham Regional Commission is calling for all structures and pipes to be removed, but the NRC only requires structures be removed down to three feet below grade.

Because Entergy "expressly acknowledges the State's jurisdiction over site restoration," the board is relying on the Department of Public Service to bring to it an acceptable plan and finds it "unnecessary to specify part of the standard now ..."

While Entergy has agreed to begin decommissioning as soon as the fund is adequate, the board noted if it grows "at its historical rate, the fund could reach the $1.16 billion amount estimated ... as necessary to finance radiological decommissioning and (spent nuclear fuel) management in under 15 years."

As of Feb. 28, the fund stood at $622,658,030.

Under NRC regulations, a nuclear plant operator can take up to 60 years to complete decommissioning. If the fund continues to grow as expected, decommissioning could begin in 2027 or sooner.

However, the NRC and Entergy are involved in a dispute over whether any of the decommissioning fund can be used for spent fuel management. Entergy has requested money from the fund for that purpose, but the NRC has denied the request, which is under appeal.

Any money left over in the decommissioning fund after site remediation has been completed will be returned to ratepayers, minus any additional contributions made to the fund after Entergy bought the plant, which will be split between the company and the state.

Bob Audette can be reached at raudette@reformer.com, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.

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